Lord Kingsland: My Lords, I am most grateful to the noble and learned Lord the Lord Chancellor for making this Statement. Like the noble Lord, Lord Goodhart, I received it only a short time ago. It may be that the noble Lord, Lord Goodhart, reads more quickly than I do, or at least absorbs information more efficiently, but I have not had the chance to take in everything that the noble Lord, Lord Carter, said, so what I am about to say should be seen in that context.
	First, will the noble and learned Lord the Lord Chancellor say a little more about how these proposals, and his response to them, fit in with the development of the legal services Bill, which is in pre-legislative review and is soon to emerge? Plainly, how the noble and learned Lord's remarks today relate to the legal services Bill is important in developing the picture about cost efficiency and financial savings.
	The second point I would like the noble and learned Lord the Lord Chancellor to reflect on aloud this morning is how he sees this new market-based approach squaring with the quality-of-service approach that he also lauded. Plainly, we all want to see legal services that are as cost efficient as possible, but it is not desirable for that to be at the cost of the quality of provision. This is not an easy matter to resolve, and I am certainly not going to pretend to your Lordship's House that I know the answer; but we have to grapple with it, as do those at the coalface deciding where the money should be spent and where it should not. I would like to see these ideas in a little more detail than they have been in the report by the noble Lord, Lord Carter. In saying that, I make no criticism of the noble Lord, because he clearly had a very wide range of issues to consider.
	One of the possible consequences of the Government adopting the noble Lord's proposals is a reduction in the number of solicitors' firms providing legal aid, although we hope the quality of advice will rise. Has the noble and learned Lord the Lord Chancellor taken into account the likely geographical impact of this on the provision of legal service throughout the country? I can see that it is highly desirable to focus on those firms that have the appropriate expertise, but this may mean some firms will disappear altogether from quite large towns. In deciding which solicitors' firms will receive legal aid contracts in criminal matters, will a geographical criterion also be applied by the DCA and the Legal Services Commission? In the context of magistrates' courts, both the noble and learned Lord the Lord Chancellor and his predecessor, the noble and learned Lord, Lord Irvine, have always stressed the importance of local justice locally delivered. I respectfully suggest that it is desirable to have legal aid advice locally delivered.
	One of the difficulties of fulfilling the task the noble Lord, Lord Carter, was entrusted with is that he has been looking at defence costs without knowing the number of prosecutions with which defence lawyers will be faced. That is particularly true with regard to large prosecutions. It is difficult to deal with legal aid in isolation from the prosecutorial policy of the Crown. It is no good complaining about higher defence costs if more prosecutions take place. Defence costs in criminal cases cannot be approached in total isolation from what is happening on the prosecutorial side.
	A good example is the recent Jubilee Line case, about which, noble Lords will recall, your Lordships' had a debate about a fortnight ago. The noble and learned Lord the Attorney-General accepted, frankly and openly, that the reason the case had gone on so long was entirely due to mistakes made by the prosecution. We will get a grip on defence costs in these more expensive cases only if we also get a grip on the way prosecutions are conducted in those cases. I am sure the noble and learned Lord understands the point very well; but when seeking to determine how to progress the Carter report, I respectfully suggest that he bear that factor in mind.
	One of the most important reasons the Jubilee Line case took a long time was the use of the offence of conspiracy to defraud. That is a notoriously vague offence in criminal law. It is ill defined, and frequently gives rise to many additional evidential requirements. In the assessment of Mr Wooler, who conducted the Jubilee Line inquiry, it added about 15 more months to the case. The Law Commission, in its report on the reform of the offence of fraud, recommended that conspiracy to defraud should be abolished. I know the noble and learned Lord the Attorney-General is reluctant to accept that. We have had a debate about it in another context, and I do not intend to dilate on the topic further today. I would be most interested to know, though, and perhaps this could be done by sampling from a few court cases, just how much time the addition of the conspiracy to defraud offence has actually added to those trials. We know the answer in the Jubilee line case; but I suspect that such an analysis will produce the same evidence in other cases.
	The noble and learned Lord will well rememberthe circumstances in which he commissioned the report—in the context of the public scandal about the amount of money expended in high-cost cases. Fifty per cent of defence expenditure costs in the Crown Court goes on 1 per cent of the cases held there. That, in absolute terms, amounts to over £100 million. With great respect to the author of the report, what he concludes is the least satisfactory part of it.
	In paragraph 97, he suggests certain changes but admits that they would save only 5 per cent of total expenditure. He says, in paragraph 98:
	"It still results"—
	even after the reforms that he suggests—
	"in approximately £100 million being spent on a small number of cases".
	He goes on to speculate on why that aspect of legal aid is still totally out of control. In paragraph 99, he says:
	"This results partly from the established policy of each contract manager negotiating independent of what is agreed on other contracts on the same case and not being aware of the case management strategy being used by other defence teams".
	He then goes on, rather despairingly, to suggest that perhaps the only way of resolving this problem is to have an overall budget for these high-cost cases.
	The noble and learned Lord's success or failure in this matter will, as he will know, depend on the extent to which he gets to grips with high-cost cases. I suggest that, on this crucial issue, the noble Lord, Lord Carter, has taken him no further and that he will need to think again about what needs to be done. The noble Lord, Lord Carter, has suggested that there should be an overall financial limit, but this could not work unless you also had overall control of the number of prosecutions brought. How can you possibly make an overall financial limit work in high-cost cases if you do not know how many high-cost prosecutions there will be?
	It seems, therefore, that the only way forward is to have very strict cost controls on each case. I am not sure how that would work for solicitors in the light of the other changes that the noble and learned Lord proposes. Indeed, we do not yet know how any of these changes will work; but, in the case of barristers, it must mean that the noble and learned Lord will have to consider whether the brief fee plus refresher system will have to be replaced by an overall fixed contracted sum, irrespective of the outcome. In other words, the risk would be shifted from the taxpayerto the Bar. I have no idea whether the noble Lord, Lord Carter, discussed this with any of the professions; or whether the noble and learned Lord himself gave evidence to the noble Lord. But I am extremely surprised not to find some analysis of that solution here, and I shall need a lot of convincing that it should be dismissed out of hand.

Lord Falconer of Thoroton: My Lords, I am grateful for the measured responses of the noble Lords, Lord Kingsland and Lord Goodhart. Perhaps I may say at the outset that throughout my Statement I should have referred to my noble friend Lord Carter of Coles rather than Lord Carter. I apologise for the discourtesy. I shall deal with the specific points raised.
	The noble Lord, Lord Kingsland, asked how this would fit in with the Legal Services Bill. The proposals are freestanding in the sense that they are not dependent on that Bill. However, alternative business structures that the Legal Services Bill would allow—for example, partnerships between barristers or partnerships between barristers and solicitors—will enable them to bid more effectively once competitive tendering comes in. The noble Lord went on to emphasise, entirely correctly in my view, the issue of quality, and I made it clear in the Statement that proper arrangements must be in place to deal with the question of quality. I refer noble Lords to pages 10 and 14 of the report setting out the specific proposals made by my noble friend Lord Carter of Coles in relation to quality. In practice, what he is proposing is that the monitoring and judging of quality be handed over to the Law Society and the Bar Council respectively and that they do it on the basis of peer review. That will take some time to introduce, but I believe it to be a sensible proposal: those who know should judge the quality of those who provide, and only those who satisfy the relevant quality standards can then be in a position to bid for legal aid work.
	The next point raised by the noble Lord, Lords Kingsland, is the worry about geographical effect, another issue that the noble Lord, Lord Carter of Coles, addresses. What happens if you live in Cumbria and you are serving a geographically difficult market? He makes the point, and we accept it, that one size does not fit all. It will cost more to provide legal services in Cumbria than it might in some inner-city urban areas.
	The noble Lord, Lord Kingsland, then made the point that many of the difficulties in long cases come not from procurement of defence services but in how the prosecution is conducted. Again, we wholly agree. The report does not in any way limit us in addressing the issue of, for example, the very high-cost case, in terms of demand as opposed to procurement of defence services. However, I have absolutely no doubt that the way in which we procure defence services will have a significant impact on the length of some civil and criminal cases. The specific difficulty in the very high-cost case is the lack of predictability found in the smaller case. We need a system whereby a fair estimate is made of what should be paid by reference to the length of the case. Once that length is exceeded then the case should become much less financially productive for those engaged in it. In practice, that is what my noble friend Lord Carter of Coles is proposing.
	The noble Lord, Lord Kingsland, continues in that vein by saying that he is not satisfied with the proposals of my noble friend Lord Carter of Coles on very high-cost cases. I would ask him to look in detail at paragraphs 4.17 to 4.23, the relevant detailed recommendations. What it amounts to is that only those who are capable of doing the long cases can bid. There should be a rigorous tendering process. There should be involvement of the prosecution, the defence and the judge in identifying how long the case should last. It should be value for money based only on that. The noble Lord asks whether consideration was given to brief fee and limited number of days. Yes, it was. This is the conclusion that my noble friend Lord Carter of Coles came to. I would therefore ask the noble Lord, Lord Kingsland, to consider in detail what he says about it.
	I think that I have dealt with all the points made by the noble Lord, Lord Kingsland. The noble Lord, Lord Goodhart, made the point on quality that I hope I answered in response to the noble Lord,Lord Kingsland. The noble Lord, Lord Goodhart, makes the point that he is anxious about limiting the number of criminal cases that an individual solicitor or barrister can take. My noble friend Lord Carter of Coles made it clear that client choice is a vital part of our system. But if we want best value tendering, it has to be, has it not, on the basis of tendering for a number of cases and winning that tender? So, a balance has to be struck between client choice and rewarding the lawyer for efficiency by allowing him to tender on price.
	I cannot guarantee that the proposal deals completely with legal aid deserts, but in the long run it will make more money available, particularly for civil and family cases. It is also clearly focused on the proposition, as I said in answer to the noble Lord, Lord Kingsland, that one size does not fit all. It will address the issue. I cannot guarantee that it will do so everywhere but I believe that it will make real progress.
	I say no to ring-fencing the civil legal aid budget. I think that it is a bad idea because it reduces flexibility. It means that we could not shift funds from one to the other when that would be appropriate.
	The noble Lord, Lord Goodhart, then raised a point on court procedures with which I completely agree. The now implemented proposals of the noble and learned Lord, Lord Woolf, have had a significant effect on civil litigation. I believe that we can do that in criminal cases as well, both in the magistrates' court and in the Crown Court. The judges have said time and again that the day of the six-month case or above is over; those cases should be shorter. The judges are keen to see implemented in practice in individual cases—for example, in a criminal case—the identification of how long the defence and the prosecution have for individual elements of the case. That promotes justice, in my view, rather than inhibits it. So I entirely agree with what the noble Lord says about the need for court procedures to make the length of cases shorter.
	Finally, the noble Lord asked whether implementation will require primary legislation. It will not. The Legal Services Bill will go ahead but none of our proposals requires primary legislation. We have published today a consultation document, which is also in the Library. The consultation period ends in October 2006. The report gives a timescale, to which I have referred from time to time. Broadly, it is that by April 2007 greater numbers of fixed fees will have been introduced, and that by April 2009 the best value tendering will have begun and the quality assurance arrangements will be in place. That is what we propose; it is on that that we are consulting, and we should get on with it.

Lord Campbell-Savours: My Lords, my noble and learned friend referred to the view of the noble Lord, Lord Carter of Coles, that £100 million would have been saved in one year, plus the value-for-money savings arising out of tendering. Do the Government accept those figures? Do they believe that that level of economy would be gained arising out these changes? In relation to the 50 per cent on 1 per cent to which the noble Lord, Lord Kingsland, referred, will those statistics stay the same or change?

Lord Kingsland: My Lords, I would like, in the context of the amendment, to thank the noble Lord, Lord Davies of Oldham, very much indeed for writing to me about what he considers to be the true interpretation of Clauses 37 and 84. The noble Lord will be relieved to know that I do not intend to take this matter any further. The noble Lord, Lord Davies of Oldham, is now on record. as a result of writing that letter, as stating, unequivocally, that the joint effect of Clauses 37 and 84 is that there will be no circumstances in which any Welsh Minister can assert that he is not bound to appear before a committee of the Assembly, or the Assembly itself when asked. That seems to me to be a satisfactory conclusion to the matter and I am sure that his letter will be reposing in the Library. I beg to move.

Lord Davies of Oldham: My Lords, I do not think there is a great deal of difference between us, nor is there a major issue at stake. I recognise that the noble Lord, Lord Livsey, pressed this issue at Report stage and he has brought it back at Third Reading. At Report stage I had hoped to indicate—I obviously did not succeed—that the provisions of the Bill are absolutely clear:
	When a First Minister loses a vote of confidence, that immediately triggers the process for his replacement. The question is, what happens in the interim? The noble Lord and I are in agreement that a vacancy could not just be declared. Like nature, government abhor a vacuum, and if there is no elected Member in charge, one has to have confidence that a civil servant should occupy that role but that runs counter to every constitutional principle that we follow as a nation in any of our elected bodies.
	The noble Lord says that another Minister could take that position. But another Minister might be a competitor for the role. How on earth could we guarantee that there would be an easy judgment about who should fulfil this role and how would that be arrived at?
	We are saying that the First Minister, having lost a vote of confidence, is a standby Minister until his or her successor is elected. The moment that election has taken place, he or she goes. It is similar to the removal van being at No. 10, when things move with considerable dispatch. Things might take slightly longer in this respect, but the principle is clear. The Prime Minister is in office until his successor takes up the new position and has kissed hands. For the Assembly, it is clear that the outgoing First Minister carries on for a very short time until the election of his successor. I hope that the noble Lord recognises that that is a reasonable provision. The Bill makes it quite clear that that is exactly what happens.

Lord Livsey of Talgarth: My Lords, I shall speak to Amendments Nos. 6 and 7. The noble Baroness,Lady Finlay of Llandaff, is unable to be here; she is on Assembly business. She wishes to support the amendment and, like the noble Lord, Lord Crickhowell, sends her apologies for not being here.
	The amendment would delete paragraph (b) of subsection (7), which refers to giving,
	"notice in writing to the First Minister of the Secretary of State's refusal to do so and reasons for that refusal".
	In Clause 95, entitled "Legislative competence: supplementary", subsection (7) states:
	"The Secretary of State must, before the end of the period of 60 days beginning immediately after the day on which notice of the Assembly's resolution is received".
	Amendment No. 6 takes out another part of the clause, and reduces the length of time to,
	"30 days beginning immediately after the day on which notice of the Assembly's resolution is received, submit the draft to the Clerk".
	It would add a new subsection to provide:
	"The Clerk shall submit the draft Orders in Council for approval by Her Majesty in Council".
	Amendment No. 7 reduces the period of 60 days to 30 days.
	The amendments relate to the process for Orders in Council and were tabled in Committee and on Report. They provide that a draft Order in Council cannot be either submitted to Parliament or rejected by the Secretary of State. They can be sent only to the Queen for approval. They were designed to liberate the Assembly from the grip of Westminster by making the process automatic, whereby the Assembly's will can prevail.
	I acknowledge that this is a radical amendment to devolve more power to the Assembly, which is, after all, a democratic body, and to take that power from the Secretary of State. Everyone committed to true democracy should support the amendment, because the Assembly has been elected by the people of Wales and it is their will to put forward draft Orders in Council. There should be confidence in that elected body's ability to do that and to be responsible. Therefore I have much pleasure in moving the amendment. I beg to move.

Lord Crickhowell: My Lords, I never cease to marvel at the ability of the Liberal Democrats to contradict its own arguments. Even with that thought in mind, I was absolutely flabbergasted when I saw this amendment. I understand, and shall comment later on, the extraordinary complexity of the inter-relationship of Clauses 103 and 104, but I understand that the amendment would require the Secretary of State to trigger a referendum in four years' time, whether or not the Welsh Assembly had requested or wanted it, whether or not any consultation by the Secretary of State had indicated that no one wanted it and whether or not there was likely to be a crushing defeat for further devolution if a referendum were held.
	When I tried to lower the hurdles for a referendum at previous stages of the Bill, the Liberal Democrats rejected my proposal on the grounds that, if a referendum were held too early and in the wrong circumstances, it would be a catastrophic setback for the move to further devolution and it should be utterly resisted. Now, here they are, moving an amendment to force a referendum in four years' time, whatever the results, even if the Welsh Assembly—which, reasonably, they say represents the views of the Welsh people—has not voted for it and does not want it. It is an astonishing amendment, even by the standards of the Liberal Democrats.

Lord Roberts of Conwy: My Lords, Clause 104 deals with the situation where the National Assembly passes a resolution in favour of a referendum by the requisite two-thirds majority of seats—that is 40 out of the total of 60. The First Minister must give notice of the resolution to the Secretary of State and then, within 120 days, the Secretary of State must,
	"lay a draft of a statutory instrument containing an Order in Council ... before each House of Parliament",
	causing a referendum to be held throughout Wales about whether the provisions in Part 4 of the Act should come into force. That is a précis of the procedure and I know that my noble friend Lord Crickhowell will have some interesting comments to make on that process under the next set of amendments. For the moment, let us assume, "So far so good". Precisely at this point I see the rub. Subsection (3)(a) says that the Secretary of State must do that or,
	"(b) give notice in writing to the First Minister of the Secretary of State's refusal to do so and the reasons for that refusal".
	The First Minister's duty then is to lay a copy of the notice before the Assembly and its duty is to see that it is published so that the people of Wales know why the Secretary of State is refusing a referendum on whether the Assembly should be granted greater powers as specified in Part 4.
	As some of us have noted, particularly the Liberal Democrats under another set of amendments, the Secretary of State has truly astonishing interventionist powers under the Bill. He can slam on the brakes, bringing the Assembly to a grinding halt, and not only when it is calling for a referendum; he has a similar power to stop the Assembly in its tracks in Clause 95 relating to Orders in Council amending Schedule 5 to change the fields of Assembly measures. Clause 95(7) allows the Secretary of State 60 days to lay a draft before each House of Parliament or to give notice of his refusal to do so, giving the reasons why. Again, under Clause 101, the Secretary of State can, by order, prohibit the Clerk from submitting a proposed Assembly measure for approval by Her Majesty in Council.
	Those almost autocratic powers to intervene might be justifiable in the context of the devilish complexities of Part 3, but surely not in connection with Part 4, which is much more straightforward. However, the powers are there, too. The Secretary of State can not only stop a referendum, but later, when the Assembly has fulsome legislative powers and is in full swing, under Clause 114(2) he can make an order prohibiting the Clerk from submitting a Bill for Royal Assent. As my noble friend Lord Kingsland said on our second day on Report:
	"The real shift in power is from this Parliament to the Executive and the Secretary of State".—[Official Report, 28/6/06; col. 1237.]
	Never were truer words uttered.
	Indeed, the more I think about it, the more extraordinary I find this interventionist role for the Secretary of State, and I know that others, including the noble Lord, Lord Thomas of Gresford, find this centralist thrust almost offensive. It certainly would be offensive to a genuine devolutionist. In fairness, I am bound to say that there is a similar power in Section 35 of the Scotland Act for the Secretary of State to prevent a Scottish Parliament Bill from receiving Royal Assent, but the circumstances for intervention in that case are much more specific—they are where a Bill is incompatible with international obligations or has adverse effects on the law relating to reserved matters.
	I shall concentrate the rest of my remarks, which I hope will be brief, on the Secretary of State's right to refuse a referendum when two-thirds of the Assembly have voted for it. That is a special category of intervention. What could be the reasons for refusing such a request if the proposal was acceptable to the Assembly and the electors of Wales? When one has dismissed potential natural calamities of tsunami dimensions, such as the drowning of the Assembly in Cardiff bay, one returns to the possible political scenario that might induce the Secretary of State to refuse to lay an order requested by the Assembly before each House of this Parliament. The fact that such an order might be voted down in either House would not, in my view, be a sufficient reason to refuse to lay it.
	The only credible reason for the Secretary of State's refusal that I can imagine is that the Government of the day do not approve of the Assembly's decision to go for a referendum and are determined to resist it at all costs. But is it really necessary to spell out the overriding interventionist power of the Secretary of State and central Government quite so blatantly in an allegedly devolutionary measure? I do not think so, which is why the amendment proposes the excision of the words. If the Government of the day oppose the Assembly's will to hold a referendum, they can defeat the order in another place or even in your Lordships' House. Surely Parliament is the proper body to overrule the Assembly on a matter such as this, rather than the Secretary of State. This Parliament continues to have an override power, as it does in Scotland, even when Part 4 comes into effect. I beg to move.

Lord Livsey of Talgarth: My Lords, we support this amendment, and it is a pleasant duty to do so, given the exchanges that took place earlier. There is clear agreement between us on the importance of this amendment, which addresses the ability of the Secretary of State to refuse to lay an Order in Council before Parliament if the Assembly has passed a resolution asking for a referendum to be held. On report, we agreed that a two-thirds majority is appropriate, but others did not agree. Given that that is now in the Bill, it is nothing short of scandalous that the Secretary of State has the power to deny such a request.
	Either there is a belief in democracy or there is not. The process in the Bill is clearly not democratic, as the Secretary of State can veto an Order in Council for a referendum to be held. The noble Lord, Lord Roberts of Conwy, has deployed all the arguments about why that is wrong, and I do not wish to delay the House further. I entirely agree with him that a referendum is a special category and that to deny a referendum is not appropriate. He is clearly also right to say that only Parliament should have the power to overrule the Assembly in such a situation. Therefore, we support the noble Lord's amendment.

Lord Davies of Oldham: My Lords, I am grateful to the noble Lord for raising this issue and I do not think there is any difference in intention between the Government and what the noble Lord has expressed in terms of the process that should be conducted. We think that we have described in the Bill a process which ought to assuage his anxieties about these issues, although I recognise that with his amendment he is seeking to be more specific.
	In practice, the sequence of events for approving a draft referendum Order in Council will be that the statutory consultation would take place first, and then the draft laid before the Assembly for approval because if it were not approved by a two-thirds majority, that would be the end of it. If it is approved, the Secretary of State would lay the draft before both Houses of Parliament for approval. That was the process we envisaged in the Bill until the recent amendment of the noble Lord, Lord Roberts. It is not necessary for Clause 104 to repeat the provisions of Clause 103. Clause 104(3)(a) refers to a draft referendum order under Clause 103(1). That reference attracts the rest of the provisions of Clause 103 and it is clear that all the provisions set out in that clause must be complied with in order to hold a referendum. Clause 103 governs the process. It is therefore not necessary to spell out that the Secretary of State must communicate the results of the consultation exercise to the Assembly. If the outcome of that consultation were to lead to the Secretary of State not laying a draft order before Parliament, that would be made clear in the reasons given to the Assembly under Clause 104.
	What we do expect is for the Secretary of State to be in close contact with the Assembly First Minister on the most important issue that the Assembly is likely to consider. We naturally would expect the Secretary of State to inform the First Minister of when the consultation had been completed and its results, simply a matter of good governance and proper administration. The aim of the legislation as drafted is to set out a minimum of what must be done rather than to spell out in every detail the process which needs to be carried out administratively.
	I hear what the noble Lord says and understand that he is seeking to be helpful and constructive here, but I think we have it right in these two clauses. We have described the essential process, but the nature of the administration is a matter for governance and administration, and therefore does not need to be spelt out in the Bill. I hope the noble Lord will see that we are of like minds on what should happen and is destined to happen, without the need for an additional amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 11 not moved.]
	Clause 150: [Power to make consequential provision]:

Lord Rooker: My Lords, the noble Lord has just raised a point that he did not raise in Committee. It is not a feature of the current controversy over donations to political parties. He actually spoke about where the donor gets the money from. That is a new issue; it has not been raised before. I cannot see how that can legitimately be put on the agenda. Where the parties get their money from is one thing, but asking where the donor got the money from is a different kettle of fish altogether. I regret that I do not have a lot more to say than I said in Grand Committee.
	Amendment No. 8 requires the Secretary of State to report on the operation of the provisions set out in Chapter 6, but the operation of these provisions is a matter for the Electoral Commission. The commission is an independent body, set up by Parliament, and it would not be appropriate to require the Secretary of State to report in this way to the House on the commission's work. There are plenty of opportunities for the commission to be accountable for its responsibilities. Parliament has set up the commission to do a job; it is not for the Secretary of State to report on it or second-guess it.
	I appreciate the thrust of both amendments and all those relating to donations in Northern Ireland, which we debated at some length in Grand Committee. We have considered the argument since 22 June when we debated these issues. We think that we are right to resist the amendments for the reasons I outlined then, which I will briefly reiterate.
	I would welcome noble Lords accepting that the Bill is a big step towards ending the current situation with regard to political donations in Northern Ireland. The present situation is untenable, unfair, undemocratic and hidden. The Bill is a massive step towards changing that process. As usual, when you give the Opposition a yard, they ask for a mile. That is what we used to do in our 18 years in opposition, of course. But it would be nice if people accepted that the Bill is a big step forward.
	As was mentioned in Committee, the ending of the disapplication period is, as the noble Lord, Lord Glentoran, said, eagerly anticipated. Under these provisions, the end is in sight. Following the end of disapplication, Northern Ireland political parties and regulated donees will continue to be able to accept donations from Irish citizens and other Irish bodies which can currently donate to Irish parties in the Republic. That is the Government's policy; it represents a considerable narrowing of the regime as it exists, while ensuring that the special place of Ireland in the political life of Northern Ireland will continue to be respected.
	We would like to stress that the precise conditions setting out the eligibility criteria for donating to Northern Ireland parties will be specified in legislation made in this Parliament. That is one of the reasons why I do not have the details with me today; we will be debating them at some time in the future.
	It is worth repeating that legislation is not the end of the matter. This House will have the opportunity to debate the proposals in considerable detail. The new Chapter 6 inserted in the Political Parties, Elections and Referendums Act 2000 by Clause 12 makes it clear that the prescribed conditions which additional categories of donors will have to meet can be prescribed only by the Secretary of State following consultation with the Electoral Commission. Such an order would have to be laid before and approved by a resolution of each House of Parliament here at Westminster. The conditions that these additional categories of donors will have to comply with will therefore be fully and publicly debated in both Houses at the time they are made. That is a big step forward from the current position—donations may come from anywhere and anyone in the world, and there is no obligation on parties to disclose them.
	It is scandalous that Northern Ireland has been allowed this period of time, compared with Great Britain. We have to regulate the situation. As Northern Ireland moves towards a normal civic society, they have to start to work within normal civic rules, and one of those is that donations to political parties are upfront and transparent. Like in Great Britain, they cannot come from anybody, anywhere in the world. However, no one is expecting the arrangements to be made overnight.
	Under the new arrangements, donations to Northern Ireland parties, including those from Irish donors, will be subject to regulation and verification by the Electoral Commission until the end of the transitional period, which we hope will be in 2010. Any impermissible donations will be required to be returned to the donee, or forfeited.

Lord Rooker: My Lords, I apologise, but I do not have the precise answer at the moment. I should like to deal with a couple of other points that I missed.
	I was asked about setting out the conditions for eligibility in the Bill as to how this will work in practice. I do not have the details yet; they willcome to the House in the form of secondary legislation. We need to consult further with the Electoral Commission and the Irish Government. We have been consulting with them to get as far as we have with this legislation, but we do not have all the i's dotted and the t's crossed. We have to consult further to determine the conditions for eligibility which need to be fair, effective and enforceable. It is no good having something that looks okay; that would be a sop. The Electoral Commission must be able to enforce the situation and the political parties must understand how these arrangements will operate on the ground. I do not know the details because I was not involved in this when I was a direct rule Minister. It was not part of my day job. I know that discussions have taken place and that we need further discussions. There have been ongoing discussions between government officials and officials from the Government of the Irish Republic. To the best of my knowledge, Ministers have not been involved. Things may have been discussed at the highest level, but those ongoing discussions between officials have been to try to arrive at a solution which will then be put to the Ministers of both Administrations for approval before they come to Parliament.

Lord Rooker: My Lords, that is unreasonable. The noble Lord has not acknowledged that the legislation is a big step forward. It is in the style of enabling legislation. We need to get this on to the statute book to get to the detail. We could not put that kind of detail into the legislation. We need to come forward with proposals that will be introduced to Parliament. The parties concerned will need to be consulted on them and there will need to be some agreement between the two Governments in any event. There will be an opportunity to debate the detail when we have it ready. In other words, if we pass this legislation today, nothing can happen about donations for political parties until we have the other legislation in place.
	It is not as though the House is being asked to approve this legislation which then sets up a brand new system of transparency, fairness, enforceability and a tightening of the rules. We need the other legislation. There will be another opportunity—probably more than one—for the House to debate these matters in detail. It would be fair to treat this as enabling legislation to take us forward. Implicit in this legislation is a large degree of narrowing of the sources of funds that can come to the political parties in Northern Ireland.

Baroness Farrington of Ribbleton: My Lords, I gently remind the House that we are at Report. Nobody except the mover of the amendment is able to speak after the Minister has sat down.

Lord Smith of Clifton: My Lords, I thank the Minister for his explanation. We have just had an illustration of how fraught the politics of Northern Ireland are. Although I welcome the thrust of this Bill and the point that it is making—I said that at the beginning—we want to know more about the technical details. The Minister said that this was an enabling provision and that we would have an opportunity to discuss the details through secondary legislation. The Minister knows full well my view that recourse to secondary legislation on the scale to which Northern Ireland has been subjected raises serious concerns. With secondary legislation, we have to take it or leave it, which is a real problem. However, reluctantly in the light of what the Minister has said, I will not press this amendment and I beg leave to withdraw the amendment.

Lord Rooker: My Lords, I shall try to give a bit more explanation, although we debated this in Grand Committee. That is not an excuse for not discussing this matter, as noble Lords have every right to bring it back on Report.
	I should tell the noble Lord, Lord Kilclooney, that, as I said in my original response, the Bill takes account of the special factors on the island of Ireland. We are not denying that; it is not being slipped in by the back door. It is open to anybody in the United Kingdom—England, Scotland and Wales—if they are on the electoral register, to donate to the political parties in Northern Ireland. The unionists in Northern Ireland are not limited to raising funds in Northern Ireland. Anyone would think that they were being treated differently from everybody else in the UK, but they are not; people are free to give to political parties in the United Kingdom, if they are on the electoral register. It is up to them who they give to; it is not a closed area. It is not as though unionists are prevented from seeking funds outside Northern Ireland. There is the rest of the United Kingdom, for a start.
	The debate which we have just had on Amendments Nos. 7 and 8 goes to the reasoning behind these clauses, and I shall have to repeat some of those points. This is a big step forward. At present, notwithstanding the complaints of the noble Lord, Lord Kilclooney, anybody in the world can get money into the Northern Ireland political parties secretly, without anything being published or known about it. This Bill stops that. It does not go all the way, but it is a big step forward.
	When the disapplication period is over, by 2010, Northern Ireland parties and the donees will continue to be able to accept donations from Irish citizens and other Irish bodies who are legally able to donate to Irish parties—that being the Republic. This is a narrowing of the regime. I take the point made by the noble Lord, Lord Smith, about the inability to amend secondary legislation that comes before this House, but I re-emphasise that it does not come out of the blue. It will come following consultation.
	I have got something completely wrong here—if this is the case, I do not think it is fair. You have to be on the Northern Ireland electoral register to donate to Northern Ireland parties, but that cannot be the case if you can donate from abroad. If you are eligible to donate in the Republic, you are eligible to donate to the North. That is the difference. There is a restriction, but it applies equally to nationalist and unionist, because it is up to people where they give their money.

Lord Smith of Clifton: My Lords, I am grateful to the Minister for giving way. If I can buy him a few more minutes, I am not sure that it will be helpful because, although I sympathise with him, his briefing on this amendment is below the normal quality we expect from him. While we are not allowed to blame officials, looking at them, they appear to be at sixes and sevens. That does not inspire a great deal of confidence that we should trust the Government to do the right thing. Therefore, if the noble Lord, Lord Glentoran, presses the amendment, we shall support him.

Lord Rooker: My Lords, it is a good job that the Lords' procedure allows us to debate amendments on Third Reading. I shall not be able to answer the points that have been made. I am now told that the second note I received was wrong. I am not sure whether that means I have to withdraw my apology. It is all too complicated. I know that it is Thursday, and we have Third Reading listed for next week, but I shall have to write to noble Lords before next week on the issue of permissible donors in the UK. There is an issue here: Northern Ireland citizens are members of the United Kingdom. I shall have to get clarification on the matter. I leave aside the Commonwealth argument, which is a separate one on which I shall seek further advice.
	As I said, we need to make sure that the changes do not constitute a back door route through which funds can be made available to political parties in Great Britain. That was a central issue that the noble Lord, Lord Glentoran, raised. Under the legislation, Irish citizens will be able to donate only to parties running candidates for election in Northern Ireland. Those parties will not be able to make donations to parties, regulated donees or candidates in Great Britain, so the measure cannot be used as a back door method of funding political parties in Great Britain. I gladly give way to the noble Lord.

Lord Tebbit: My Lords, I am grateful to the noble Lord, because this is as full of holes as an Edam cheese—I think that Edam has holes in it, doesn't it? No, not Edam—it is Gruyère. It is unlikely but not inconceivable that one or other of the Ulster Unionist parties could resume the relationship that the Ulster Unionists had with the Conservative Party before 1970. That may be unlikely, but legislation should provide for what is possible and not just what is likely.

Lord Rooker: My Lords, I agree. I have to say that to the best of my knowledge at no time was this issue covered in any of the briefings on the Bill that I have read or in any of the debates in the other place—noble Lords should not forget that the Bill came to this House having been thoroughly debated in the other place. I looked at some of the Standing Committee debates. The noble Lord, Lord Tebbit, is quite right; there was a time when the Conservative and Unionist parties were linked and fought on a UK-wide basis. At no time in any of the briefings on this legislation has that situation been envisaged for the future. I shall seek to rest my case on that, having dug myself half way out of the hole and I shall make sure that I write to noble Lords well before Third Reading.

Lord Kilclooney: My Lords, it is refreshing to hear the words of the noble Lords, Lord Smith and Lord Glentoran. There has to be a plan B. Of course, Her Majesty's Government have already announced such a plan because when the Prime Ministers of the Republic of Ireland and the United Kingdom met in Armagh City in May, they said that, failing the creation of an Executive on 24 November, the Dublin Government and Her Majesty's Government would work more closely together in the administration of Northern Ireland. At the time, we saw what was in my opinion substantial decommissioning by one of the terrorist groups, the IRA. The other two main paramilitaries, the UVF and the UDA, were also moving towards decommissioning. But what happened? Following the announcement by the two Prime Ministers that Dublin was going to become involved in the administration of Northern Ireland should the Executive not be created on 24 November, the two loyalist paramilitary groups immediately announced that they were not proceeding with decommissioning.
	Alarm bells started ringing right across Northern Ireland. It was seen as a compromise by Her Majesty's Government that the Republic of Ireland would become involved in the internal affairs of Northern Ireland. Noble Lords may think that this is not important, but to the people who live in Northern Ireland it is very serious indeed. It is time that notice was taken of the danger of that statement. Whether you disagree with it or not, it was a plan B. The great news is that both the Liberal Democrats and the Conservatives are thinking of alternative plan Bs, but it is very important to recognise what is happening in Northern Ireland today. I do not believe that we will have a settlement by 24 November—I shall not go into the reasons why.
	Yesterday we had our national holiday, and there is a holiday today as well. What was significant in Northern Ireland yesterday was that the Union flag was not flown as much as usual. Across Northern Ireland, the Ulster flag—the Northern Ireland flag—began to emerge as the main flag flown by the majority community. That is a warning to Her Majesty's Government and to Parliament in London: things are beginning to move in Northern Ireland in very dangerous way. I do not want to exaggerate the situation, but I believe that the British majority in Northern Ireland is preparing for a major conflict. It is time that the Government addressed this problem before it overtakes them.

Lord Rooker: My Lords, I realise the seriousness attached to the issue in the amendment and I hope that I have made it clear that the Secretary of State, along with the whole Northern Ireland team, shares those concerns. The current Order in Council process is not adequate in the long term, but while I do not want to revisit old battles, one has to admit that it has served Northern Ireland since, I think, 1972. I cannot believe that that was not looked at during the long years of Conservative Government to try to find a better system for more scrutiny in both Houses. Obviously, a solution was not found. We do not have one either at the moment though I suspect that every Member could find a way of doing it.
	We take the concern seriously, but we may not be believed until we have put our solution on the table. At the moment the Government are not prepared to put a solution on the table. I am not saying that these issues are not thought about. We genuinely do not want plan B or plan C to interfere with plan A; we want the Assembly back. It is the duty of Northern Ireland politicians to get elected and to serve their people. Direct rule and inadequate scrutiny of Orders in Council have to be second best in any democratic process. If restoration of the Assembly is not possible, we would want to engage with Members of both Houses to find a way of making the system work better. We have had discussions in the past 12 months on that but we have not come up with a Northern Ireland-proof solution, specifically for it—though I accept that the amendment is—that does not spill over into the management of the business of secondary legislation across the Houses. The Secretary of State has asked and charged the Minister of State, David Hanson, to take this matter forward with the parties in due course if that situation arrives. However, we do not want to plan for failure.
	For some, the present situation is very comfortable—direct rule, part-time commuting Ministers; it's great for them. They love it because they do not have to grow up and take decisions themselves. They coalesce only in attacking the Government; it's the one thing that unifies them. They don't have to stand up and say what they would do, how they would fix the budget. They have no responsibility whatever. We want them to grow up and take adult decisions on behalf of those they seek to represent. But some people are comfortable with the status quo. I genuinely think that the amendment, though it may offer the seeds of a possible solution, could get in the way and help the prize slip from our grasp. We have some distance between now and24 November. I realise that there will be a Recess, but I think that the situation will hot up considerably towards the end of the September/October period. I do not want to say anything now that will cause problems in that period.
	I want to put a couple of points to noble Lords. One of my colleagues in the other place, devaluing the argument somewhat, said to me, "I don't understand what the Conservatives are complaining about. They are a party of government; they have been in government and aspire to be a Government, and the Lib Dems haven't been there for 100 years or near enough, yet they come up with these solutions because they think it's easy". Well, it isn't easy. If it was, we would have found a solution by now. In fact, we would have found a solution under the direct rule of the Conservative Administration.

Lord Rooker: My Lords, perhaps I can just make this point. Then I will give way to the noble Lord, obviously.
	We have looked at the amendment, and I have had brief discussions during the week. If it were carried, we could not, for a start, use the Grand Committee process. We could not use the Grand Committee process in this House to discuss the draft of an amendment because it is rigidly organised to allow debate only on non-controversial matters and does not allow for changes or amendments. That does not apply to every order; many orders could be considered there. However, those orders could not go to a Grand Committee. They would have to be considered on the Floor of the House. We have to find ways of dealing with this—ways that have not been found in all the years since the Stormont Parliament was first set aside.
	The noble Lord, Lord Smith, talked about a failsafe. I say with due respect that, because we are serious about the date of 24 November, a failsafe will have to be seriously and urgently considered after that date. We do not want to do so beforehand, for the reasons I have explained.
	I shall briefly address the point made by the noble Lord, Lord Kilclooney; it is not the first time that he has made it, and I made sure that those responsible for the issues were made fully aware of his point when he first made it. The tune changed slightly. It is not envisaged—it was never part of the plan—that the Government of the Republic of Ireland will in any way, shape or form be involved in the administration of Northern Ireland. We have no mandate as a Government for that and do not seek it, but I and colleagues have pointed out that the cross-border issues do not go away, given all the pressures of the economy and the position of the island of Ireland within both Europe and the world economy. For example, we have had questions in the House recently about a common corporation tax on the island of Ireland, specific to businesses both north and south. They can make a case that it ought to be different from Great Britain. That pressure comes not because of political forces, but because of the economic changes in the world. I am not saying that it will happen, but there will be areas of co-operation. Part of the Bill creates a wholesale electricity market; that is part of those pressures.
	I was going to mention the subject of yesterday earlier, and have just been reminded of it; I was obviously not there. Yesterday was the most peaceful 12 July for 30 years. In fact, it was the first time in30 years that the Army was not deployed on 12 July. That is absolutely fantastic. I am still doing duty weekends in Northern Ireland, and I have seen the collection of the bonfires ready and all the paraphernalia that goes on which people want to celebrate. I know what has happened in the past as a result of that, whether it is hotheads or others just out to cause trouble. The atmosphere that we have at the moment, when 2006 is the first time in 30 years that the Army is not out on the street on the major holiday, has to be of major significance.
	The noble Lord, Lord Kilclooney, made a point about flags; I cannot respond to it in detail. I look on it as maybe positive that other flags were used rather than the flags of the past, although I take the serious point—the implication of what he said—that the loyalist paramilitaries are keeping their arms ready to fight British soldiers. That threat is the implication of not disarming; he agrees. It is outrageous. We want them disarmed like the others. There is no excuse for the paramilitaries to keep their weapons. There is no selling out, to use the terms that people have used in the past. The Government of the Republic will not be involved in the administration and governance of Northern Ireland, but there will be north-south co-operation as there are areas of co-operation east-west, such as the health service. Citizens of the Republic can go into hospitals in Northern Ireland, particularly the north-west, where the hospitals are closer to them than those in the south. I am sure that such good areas of co-operation will continue.
	That does not mean to say that the Government of the Republic will be involved in the administration of Northern Ireland. That is not a plan B. However, it is a natural consequence that if there is not a Northern Ireland Assembly, we as the UK Government will not mind the shop. We will push forward areas of reform—of public administration and of other areas in Northern Ireland—and, where it suits us both, particularly in economic co-operation, it makes sense to have those arrangements. However, that can in no way be construed as the Government of the south having a role as a threat over the non-Assembly. If the Assembly were up and running, I suspect that the same thing would happen, because the economic forces would drive north and south to do such things on a joint basis.

Lord Smith of Clifton: My Lords, the noble Lord's peroration is part of his rhetorical repertoire to keep the momentum going, but I am afraid that I have to bring us back to a couple of his points. He said that the Conservatives did nothing about secondary legislation during their time of direct rule because, like the Labour Party, they are a party of Government, but that the Liberal Democrats have not been in Government for a long time. That reveals a mindset about executive government that erodes the role of the legislature and is all part and parcel of the modern cast of mind of Government. I do not find it a very convincing argument.
	Secondly, the noble Lord, as he does, showed very real sympathy. As I said in Grand Committee, I remember that in a previous incarnation the noble Lord was in the forefront of radical constitutional reform, and it is good to see the residues still there, although they are becoming less and less, I fear. We must look at this from the point of view of democratic accountability. The argument that it is not convenient at this stage to consider a plan B means that there is the danger that the parties in Northern Ireland will think that24 November is a moveable feast.